State of Kerala and Another vs Chellappan Pillai

M.S. Menon, J.—The State of Kerala and the General Manager, Travancore Minerals Concerns, Chavara, are the appellants before us. They were the defendants in O. S. No. 19 of 1958 of the District Court of Quilon. The respondent, a contractor of the Minerals Concerns, was the plaintiff in that suit. The claim was for a sum of Rs. 12,669-1-6. The lower court considered the various contentions urged before it and decreed the suit with costs.

Ext. D1 is the agreement between the parties. It was concluded on 16-11-1954 and was to be in force for a period of one year from that date.

Under the agreement the respondent had to collect sand from the mining area on the beach and to give delivery at the elevator pit. After the collection at the beach and before the trucking to the elevator pit the respondent was bound to dry the sand and stock the same "in sheds which will be provided by the Concerns at the landing places from time to time."

Subsequent to the contract the Minerals Concerns took on lease a property outside its original premises and put up three sheds therein in addition to the sheds in the old premises. It is not possible to say that stocking in sheds outside the original premises was in the contemplation of the parties at the time the contract was entered into or that such sheds come within the ambit of "sheds which will be provided by the Concerns at the landing places from time to time". Those words can only cover such sheds as are provided at the landing places in the original premises and not at any place or places outside those premises.

It is common ground that the respondent was paying his labor only 8 annas 41/2 pies per ton for the trucking operation from the sheds in the original premises to the elevator pit and that he had to pay 7 annas pies more per ton in respect of the 25,084 tons which he trucked from the new sheds to the elevator pit. The claim in the suit is for the recovery of the enhanced payment made by the respondent.

The correspondence relating to the enhanced rate consists-in chronological order-of Exts. P. 9 (19-5-''55), D. 4 (21-5-''55), P. 2 (27-5-''55), P. 10 (31-5-''55), P. 4 dated nil, P. 7 (11-6-''55), P. 14 (19-7-''55), P. 11 (28-7-''55), P. 12 (14-9-''55) and D. 7 (17-5-''56). Of these Ext. P. 1, a letter from the Workers'' Union, justifies the demand for payment at Re. 1/- per ton as follows:

The average distance of the four existing sheds is 645 ft. for which we are receiving Rs. 0-8-41/2 The distance of the new sheds is 1100 ft. for which we have demanded Re. 1/- only. On an average we have to cover 450 ft. more, while a distance of 950 ft. has to be covered more from the shed least away from the conveyer. So a comparative study it is found that our demand is only proportionate to the existing rates, if not a little less.

None of these letters, however, or anything else on record justifies the respondent''s contention that the appellants agreed to pay him at the enhanced rate for the trucking from the new sheds to the elevator pit.

The only further contention that arises for consideration is whether the respondent is entitled to be paid at the enhanced rate even in the absence of an agreement to that effect. His contention is that he is so entitled by virtue of section 70 of the Indian Contract Act, 1872. That section provides:

Where a person lawfully does anything for another person, or delivers anything to him, not intending to do so gratuitously, and such other person enjoys the benefit thereof, the latter is bound to make compensation to the former in respect of or to restore, the thing so done or delivered.

Of the 25,084 tons trucked from the new sheds to the elevator pit 971 tons were trucked prior to Ext. P. 14 and the balance of 24,113 tons subsequent to it. Ext. P. 14 dated 19-7-1955 told the respondent in unmistakable terms that the appellants were not prepared to pay him at the enhanced rate:

With reference to his letter dated 31-5-1955 on the above subject and in continuation of this office memo TM1/788/55 of the same date, Shri E. Chellappan Pillai, Raw Sand Contractor, is informed that his request for reimbursement of the excess charge of Rs. 0-7-7J per ton for trucking sand from the new sheds, cannot be granted.

The terms of section 70 of the Contract Act are no doubt wide; but there can be no doubt that the section has to be applied with discretion and that it will be a very extravagant construction indeed to say that it will justify either an officious interference or the imposition of obligations in respect of services which the person sought to be charged did not desire or desire at the prices and on the terms at which they were offered.

It follows that there is no justification whatsoever to award any enhancement in respect of the 24,113 tons trucked subsequent to the date of Ext. P. 14. The 971 tons trucked prior to that date, however, stand on a different footing and we think we will be justified in upholding the decision of the court below as regards that quantity.

The lower court awarded interest from a date earlier than the date of suit. This was clearly wrong. As pointed out in AIR 1938 67 (Privy Council) interest for any period anterior to the date of the suit can be awarded only "if there is an agreement for the payment of interest at a fixed rate, or it is payable by the usage of trade having the force of law, or under the provision of any substantive law entitling the plaintiff to recover interest". In the present case there is neither usage nor any contract, express or implied, to justify the award of interest and it must follow that interest can be awarded only from the date of the suit and not from any date prior to that date.

In the light of what is stated above the decree of the lower court has to be modified and the amount decreed reduced to Rs. 462-11-101/2 with interest thereon at 6 per cent per annum from the date of suit. The appeal is allowed in the manner and to the extent indicated above. In the peculiar circumstances of the case, however, the parties will bear their respective costs both here and in the court below.